Advancetire, a retailer and wholesaler selling quality car parts in Angola, sets itself apart in highly competitive market by investing in its staff’s product knowledge and management skills.
"You need to know your products well to show customers the advantages and main differences between brands,” says Radwan Faraj, who founded the company in 2019. The company has been growing sustainably.
“Our approach is to educate the customer. For example, it is important that you buy the right kind of lubricant for your car or vehicle,” notes Faraj, who has more than 25 years of experience in the sector and ran his own company in the US before exploring opportunities in Angola. Each type of tire has its own specific properties, and the customer needs to weigh the costs and lifespan of the tire.
Advancetire sells only original tires (52% of sales), spare parts (18% of sales), lubricants (17%), batteries (8%) and tools and accessories. The quality of the products, all imported, also sets the company apart.
Faraj: “You often see that the low-quality products are dumped in Africa. We sell quality car parts at good prices. In turn the consumer learns what products are safer to use. People also are slowly becoming aware that the products should meet worldwide certifications."
Investing in staff
The company founder says he thinks the reason for his business’s growth and steady gains in market share are because “we believe in our staff and management, and we invest in them.” Staff has been sent to different trainings – both in product knowledge and management skills - in Dubai, South Africa and Angola.
A good example of the company’s investment in staff development is Ines Maria. She joined the business as a cashier. Following various company-funded scholarships and internal training and mentoring, she is now next in line to become the manager of the main store. Almost 30% of the employees are women, including the Chief Operations Officer.
Advancetire has five shops, three in Luanda, the country’s capital, one in Soyo in the north which is the largest oil-producing region in Angola, and one in Lobito, home to the main seaport. It also sells its products, which are all imported, to franchisees and even to some competitor shops.
Advantire sought a new financier that could provide larger investments to support the company’s expansion plans over time instead of smaller short-term bank loans. “What I like about XSML,” says Faraj, “is that I get personal attention and that we can forge a close relationship."
"If I need something, I can contact a local person directly. In Africa, you need to be dynamic and able to adapt quickly as circumstances can change day to day. This is a quality that I recognize in XSML.”
XSML has provided the company with a US$ 2.5 million loan to support its working capital needs. The company believes this will take it to the “next level”. “We can capture more of the market because we will be able to offer a larger and more stable product range,” says Faraj.
XSML’s first investment in the automotive sector
Despite the highly competitive market, XSML sees Advancetire as a promising investment. The owner has the entrepreneurial and managerial skills it is always looking for, the company has the potential to become an industry leader, and there will always remain a stable demand for car parts even if the economy would be growing poorly.
“With his entrepreneurial skills and flexibility Mr. Faraj has built a company that weathered the economic shocks Angola endured in recent years," says Gildas Mouelle, Senior Investment Associate XSML Capital.
"He also pays strong attention to his staff’s wellbeing and professional development. We believe that the company can grow into one of the sector’s leading players.”
The sector is forecast to grow more than 10% annually as the government is promoting investment in infrastructure, construction, real estate, manufacturing and agriculture to diversify the economy which relies primarily on the oil production. “All these activities use vehicles. They need our products,” says Faraj.